Transcobalamin II receptor (TC II-R) exists as a monomer and a dimer of molecular masses of 62 and 124 kDa in the microsomal and plasma membranes, respectively. In vivo, pure TC II-R monomer dimerizes upon insertion into egg PC/cholesterol (4:1) liposomes. The current studies were carried out to define the mechanism of TC II-R dimerization. Both enzymatically deglycosylated (45-47 kDa) and mature pure TC II-R (62 kDa) demonstrated optimal association and formed dimers of molecular mass of 95 and 124 kDa, respectively, at 22 C in association with egg PC vesicles containing at least 10 mole% of cholesterol. Mature receptor also dimerized upon insertion into dimyristoyl phosphatidylcholine vesicles at 5 C in the absence of cholesterol or at 22 C with lipid vesicles prepared using lipid extract from the plasma, but not microsomal membranes. Cholesterol depletion of native intestinal plasma membranes or its enrichment of microsomal membranes resulted in the in situ conversion of the 124 kDa dimer to the 62 kDa monomer or of the monomer into the dimer form, respectively. Treatment of the plasma membranes with phospholipase A2 resulted in the in situ conversion of the dimer form of the receptor to the monomer form. Spin-label studies using 1-palmitoyl, 12 doxylsteroyl PC revealed that interactions with TC II-R increased order around the probe. Based on these results, we suggest that dimerization of TC II-R is 1) mediated by its interactions with a rigidly more ordered lipid bilayer membrane; 2) in plasma membranes, is regulated by cholesterol levels; and 3) is independent of glycosylation-mediated folding.